DWP’s Endless Storm

Photo by Robert Yager

About a three-hour drive north of Los Angeles in the high desert, stretched out like a crooked finger between the Sierra, White-Inyo and Coso mountains, lies the storied Owens Valley. Visibility is often obscured by what is known as “Keeler fog,” a toxic mixture of alkaline dust laced with arsenic particles that swirl off a dry lakebed in the gusty winds and become embedded deep in the lungs when inhaled.

In an unusual attempt to slice through a fog of mismanagement, or perhaps out of sheer exhaustion, 16 of the Department of Water and Power’s unionized employees on site in Keeler recently went before an employee-assistance counselor to describe what they see as a crisis of leadership and fiscal waste at the nation’s largest public utility.

Most Angelenos know that Owens Lake went dry in 1926, and that the DWP was in large part responsible for accelerating that environmental disaster. But what ratepayers don’t know, according to DWP workers on a 30-square-mile, federally mandated dust mitigation project, is that mega-contractor Ch2M Hill is soaking up DWP money just like DWP founder William Mulholland grabbed Owens Valley water a century ago, when he is said to have instructed his workers, “There it is, take it.”

For the past year, DWP managers have ignored persistent complaints of careless design, shoddy workmanship and excessive costs, according to the workers at the project, which is aimed at irrigating the dry lakebed, eventually to the tune of a half-billion dollars. When they spoke up about what they felt were Ch2M Hill’s failures and abuses, the workers say they were told to stand down by DWP managers who occasionally fly in by helicopter to assess the situation.

The cries of mismanagement got so loud that on September 29, the DWP sent Janet Kennedy, a consultant with Denver-based Horizon Behavioral Services, to counsel the workers in Keeler, according to four of the 16 who attended a two-hour therapy session. The employees, some veterans and some newcomers, told Kennedy they feel marginalized and abandoned. “People in Los Angeles have no idea how their water rates are being spent,” said one worker after the meeting. “Ch2M Hill is screwing the public and the DWP is telling us to keep our mouths shut,” said another.

When they turned to the International Brotherhood of Electrical Workers Local 18, the workers say, union representatives Russ Butow and Ken Delgado tried to mollify them but failed to protect jobs or the DWP’s resources. The DWP workers, many of whom live in Los Angeles and must choose between a three-hour commute or living away from their families, say the IBEW has allowed Ch2M Hill, a Colorado company, to push them aside, hire private workers and run up costs on the city — which is using borrowed money for 70 percent of the project. Private workers on Owens Lake outnumber IBEW members by 2-to-1, according to sources at the site, not including the independent subcontractors that Ch2M Hill has hired. The DWP has approved the hiring of 20 union workers, but so far only two have been hired, employees say.

DWP officials are just now looking into how millions of its dollars have been spent, despite two retroactive approvals by the City Council for cost increases since 2002 and a third amendment that raised Ch2M Hill’s contract to $106 million, in 2004. Earlier this year, according to the workers, DWP senior internal auditor Winetta J. Leslie conducted an audit of the project. DWP officials did not return calls for comment. By Wednesday afternoon the DWP had not released the audit report. And recently, DWP chief operating officer James McDaniel, in charge of the water system, had safety manager Leland Gong investigate allegations of OSHA violations, waste and mismanagement, workers say. McDaniel did not return calls for comment. Gong is on vacation.

Independent subcontractors are surprised the DWP has stood by as contracting costs have spiraled out of control. “Time and materials is pretty wide open,” says a subcontractor who has worked on the project. “And it’s pretty easy to get a change order.”

Air quality regulators in the area, while acknowledging the project is improving air quality, are shocked at the cost. An official with the Great Basin Air Pollution Control District, which monitors pollution levels under federal Environmental Protection Agency guidelines, says Ch2M Hill is spending an unbelievable amount of money on a project that has none of the obstacles the DWP encountered in designing, building and maintaining its own water system. “I’d listen to the [DWP] workers,” says the official, who asked not to be named. “Construction and design should be simple. There’s nothing in the way out here, just blow and go. Ch2M Hill thinks they know better. There’s an arrogance to it.”

Launched in 1998, the Owens Lake Dust Mitigation Project is the result of Los Angeles’ long-standing diversion of water from the Owens Valley, according to a March 2004 report by City Administrative Officer Bill Fujioka. He warned that capital costs, once estimated at $120 million, now at $415 million and expected to exceed $500 million, would require the DWP to jack water rates by 4 percent. The DWP raised water rates 11 percent last year, and has proposed an 18 percent rate increase over the next five years. The contract with Ch2M Hill was first estimated at $42 million but now is approved for $106 million, according to Fujioka’s report. “The cost of the Owens Lake Dust Mitigation Project has dramatically increased since its inception,” he wrote to former mayor Jim Hahn in his 2004 report. “A more cautious approach to oversight may be justified.”